EXIM Policy manufacture includes repacking and relabelling, supporting EOU exemption claims subject to factual verification.

R acking and relabelling by a 100% EOU are treated under the EXIM Policy as manufacture, because that policy defines manufacture more broadly than section 2(f) of the Central Excise Act and expressly includes such processes. If the imported or domestically procured goods were so processed before export, they would not be treated as exported as such and the exemption under Notification No. 22/2003-C.E. and Notification No. 52/2003-Cus. could be sustained. As the factual claim of repacking and relabelling and the plea of revenue neutrality through export drawback had not been examined, fresh de novo adjudication on facts was considered necessary.

---

---

Issues: Whether repacking and relabelling of goods by a 100% EOU amounts to manufacture under the EXIM Policy so as to sustain the exemption under Notification No. 22/2003-C.E. and Notification No. 52/2003-Cus., and whether the matter required remand for factual verification.

Analysis: The definition of manufacture under the EXIM Policy is wider than section 2(f) of the Central Excise Act, 1944 and expressly includes processes such as repacking and labelling. If the goods imported or procured domestically were subjected to repacking and relabelling before export, they could not be treated as exported as such without manufacture. The adjudicating authority, however, had not examined the factual claim that such processes were carried out, nor had it considered the plea of revenue neutrality based on export drawback. In the absence of findings on these material aspects, fresh factual examination was necessary.

Conclusion: Repacking and relabelling, if established, would amount to manufacture for the purpose of the EXIM Policy and could preserve the exemption claim, but the matter had to be remanded for de novo adjudication on facts.

---